IN the biggest aviation insurance settlement in the Philippines, and possibly in Asia, the Prudential Guarantee & Assurance Inc. (PGAI) has agreed to pay $165 million (P7.5 billion) to the families of those who perished in the crash of Air Philippines Flight 541 on Samal Island, Davao, some eight years ago.

The settlement was announced by Robert Coyiuto Jr., president of the PGAI, the leading aviation insurer in the country which insured the plane, a low-cost carrier arm of Philippine Airlines owned by tycoon Lucio Tan, Prudential said in a statement.

The families of the 110 passengers and crew of the doomed flight had filed a case in Chicago, Illinois, against the plane’s owners who leased it to Air Philippines. But the lawyers of both parties were able to convince their principals to settle ahead of the first scheduled hearing in September.

Press reports said the “meeting of minds” of the lawyers that led to the out-of-court settlement was prompted by findings that the fuselage of the crashed plane had been totally burned so much so that it would have taken “a long, expensive and exhaustive investigation” to prove, if at all, allegations that mechanical defects had caused the crash.

The US lawyers of the victims’ families had contended that the ill-fated Boeing aircraft was not well maintained and had several defective parts. The lawyers also took to task the AAR Aircraft & Engine Group and Fleet Business Credit Corp. of the US for leasing the “ageing plane” to developing countries. Before the plane was leased to Air Philippines, the Southwest Airlines Co. of the US used it for 20 years.

Philippine investigators, however, found that the accident was caused by pilot error and absolved Air Philippines of any liability regarding the alleged condition of the plane.

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Prudential to pay crash victims $165M

IN the biggest aviation insurance settlement in the Philippines, and possibly in Asia, the Prudential Guarantee & Assurance Inc. (PGAI) has agreed to pay $165 million (P7.5 billion) to the families of those who perished in the crash of Air Philippines Flight 541 on Samal Island, Davao, some eight years ago.